It has been a good couple of years for the Saudi Stock Exchange (Tadawul), which posted considerable growth in 2011 and 2012. Market capitalisation was up more than 10% over 2011 due to a spate of initial public offerings (IPOs) in late 2011 and 2012. However, while the Tadawul is the largest and most liquid exchange in the region, it lacks large institutional investors; around 90% of trading activity in recent years has been driven by individual retail investors. Additionally, the exchange-based bond market remains small and largely operates on a buy-and-hold basis. Yet despite these issues, the Tadawul is widely expected to continue to grow in the coming years: the government’s ongoing large-scale infrastructure and housing investment programme will likely result in considerable demand for local financing for some time to come.